Bowen intervenes to secure regional fuel supply amid panic buying
Updated ,first published
Labor intervened to secure regional fuel supply chains in one of the harshest market interventions since oil rationing during the Second World War, as Energy Secretary Chris Bowen forced suppliers to sell to idle independent regional service stations.
Bowen’s moves come as the federal government shows signs of tension after weeks of pressure to address fuel shortages and calls from state leaders for a national approach to fuel conservation.
This imprint revealed on Wednesday that a national cabinet meeting will be held the following Monday. The Australian Financial Review reported on Thursday It was stated that senior ministers expressed their concerns to Prime Minister Anthony Albanese about “unnecessary secrecy” regarding the day of the meeting.
Albanese initially backtracked by opposing Australia’s response to fuel shortages, saying it was up to the states, but he is now expected to discuss a national plan at Monday’s meeting.
Behind the scenes, Bowen is using the power provided by the crisis to force companies to buy fuel in regional areas.
Typically wholesale suppliers sell most of their fuel under long-term contracts with large retail chains such as BP, Caltex and Ampol, while independent service stations enter into short-term agreements on the spot market. Since the beginning of the war, large chains had excluded small buyers.
Bowen announced last week that the government would release 20 percent of the country’s fuel stock held by suppliers. Yesterday he confirmed that this fuel, equivalent to six days’ average national consumption of diesel and five days’ worth of petrol, would go to regional areas.
This is the most dramatic intervention by a government in the private fuel sector since ration books were issued to drivers between 1940 and 1950 to reduce demand by 50 per cent.
While independent service stations in regional areas have struggled to keep up with demand in the weeks since the start of the Iran war, there has been panic buying and a doubling of fuel demand as major retailers continue to secure relatively better supplies under long-term agreements.
To ensure fuel went where it was needed, Bowen forced fuel suppliers to guarantee they would sell to regional independents.
Bowen did not declare a national emergency, which would give him the authority to control the management, allocation and distribution of fuel supplies across the country under the Liquid Fuel Emergency Act.
But the threat that he might do so secured the cooperation of fuel suppliers.
The National Highways and Motorists Association welcomed Bowen’s intervention and said the energy minister should not hesitate to use emergency powers if tougher action is needed in the future.
“Our message is: Work hard, minister. Do whatever you have to do. Reach out and shake every branch to make sure the supply chain is working for the nation,” said NRMA spokesman Peter Khoury.
“He can always take legal action if threats don’t work. But we are of the view that with appropriate government scrutiny we will achieve the right outcome for Australia.”
Suppliers are delivering more oil to regional areas than during the same period last year, Bowen said Thursday. Viva Energy delivered 43 per cent more fuel to regional independent service stations in NSW and 22 per cent more fuel to Queensland. Ampol sends 40 per cent more money to regional independents in NSW, 33 per cent more to Queensland and 19 per cent more to Victoria.
“This keeps up with the huge increase in demand we saw in the days following February 28 [attacks on Iran by the US and Israel]said Bowen.
While Bowen has given updates on fuel shortages in every question this week, opposition energy spokesman Dan Tehan said the government should publish daily bulletins on service station shortages, such as covid infection numbers provided by states during the pandemic.
On Thursday, Bowen outlined the shortage in all states: in NSW, 178 have run out of diesel and 48 have run completely dry; In Victoria, 45 stations do not have diesel fuel and 72 stations do not have unleaded fuel; In Queensland, 55 do not have diesel, 33 do not have regular unleaded fuel; In South Australia, nine stations are diesel-free and 10 stations are unleaded; 40 stations in Western Australia have no diesel, 14 have no unleaded fuel; In Tasmania, five people do not have diesel.
Albanese once again urged people to only use as much fuel as necessary, with Labor imploring One Nation to avoid causing consumers to panic.
After days of crackdowns on the opposition, Albanese on Thursday began cataloging the government’s actions over the past two weeks during that period.
When rationing began in late 1939, Australia had three months’ supply of fuel to weather a long-term disruption in supply. By contrast, Australia had about a month’s supply of petrol, diesel and aviation fuel when the Iran war began on 28 February.
Panic buying has caused demand to double from motorists, farmers and other fuel users worried about the closure of the Strait of Hormuz, which provides about 20 percent of the world’s oil supply.
But Asian refineries, which supply about 80 per cent of Australia’s fuel, could run out of crude oil stocks within a month and it remains unclear how potential shortfalls can be filled.
A spokesman for BP said its priority was to maintain supplies to its customers and was working closely with governments and distributors to deliver fuel to regional areas.
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Mike Foley is the climate and energy correspondent for The Age and The Sydney Morning Herald.Connect via email.
Paul Sakkal is the Chief Political Correspondent. He has previously covered Victorian politics and won the Walkley award as well as the 2025 Press Gallery Journalist of the Year award. Contact him securely on Signal @paulsakkal.14.Connect with: X or email.
